Seoul to Promote High-Density Reconstruction... Floor Area Ratio Relaxed to 500% and Up to 50 Floors Allowed (Update)

Government to Announce Housing Supply Expansion Plan on the 4th
High-Density Development in Key Locations and Supply of 132,000 New Units

[Image source=Yonhap News]

[Sejong=Asia Economy reporters Kwangho Lee and Hyunjung Kim] The government is introducing a public reconstruction system as part of expanding supply to stabilize the real estate market, and will significantly relax floor area ratio and height restrictions for reconstruction apartments in Seoul. Along with land development such as the Taereung Golf Course site in Nowon-gu, Seoul, a total of 132,000 new housing units will be supplied. Since there are limits to the supply scale that can be secured solely through land development in core locations with high demand, high-density development will be allowed, and some demand will be dispersed to the metropolitan area. However, there are concerns about how much the market will respond to high-density reconstruction based on public contributions such as donations.

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, held a government joint briefing after the Housing Supply Expansion Task Force (TF) meeting on the 4th and announced the 'Housing Supply Expansion Plan,' stating that a total of '262,000 housing units + α' will be supplied mainly in the Seoul metropolitan area. This includes 132,000 new supply units + α, 60,000 units of early pre-sale supply brought forward from planned public sale volumes, and 70,000 units of supply already announced in the 5th and 6th measures.

First, the government will introduce 'public participation high-density reconstruction' to supply a total of 50,000 units over the next five years. Public institutions such as the Korea Land and Housing Corporation (LH) will participate, and on the condition that some housing units are donated, the floor area ratio will be increased up to 500%, and the height restriction, previously capped at 35 floors, will be relaxed to 50 floors. However, the price ceiling system will also apply to public reconstruction. 50-70% of the increased floor area ratio must be donated, and more than 90% of the expected profit from the increased floor area ratio will be recovered based on the expected rate of return.

Public idle sites such as the military golf course Taereung Golf Course in Nowon-gu, Seoul, the Seoul Regional Public Procurement Service in Seocho-gu, and the Seoul Regional Headquarters of the Korea Land and Housing Corporation (LH) in Gangnam-gu will be developed as public land to supply 33,000 units. The supply scale of the Yongsan Maintenance Depot in Seoul, previously announced as 80,000 units, will be increased to 10,000 units, and 4,000 additional housing units will be supplied through high-density development in planned complex development project sites. The pre-sale volume for the 3rd new town, which was planned at around 30,000 units, will be doubled to 60,000 units.

Along with this, the government plans to promote the confirmed measures through land acquisition, land development, and amendments to the Urban and Residential Environment Improvement Act, and will hold weekly meetings of related ministers to monitor the real estate market and respond to disruptive and unstable factors. Before the meeting, Deputy Prime Minister Hong emphasized, "We will strive for absolute stabilization of the real estate market through strong measures and thoroughly eradicate market disruption through strict market monitoring."

However, experts believe that the scale of maintenance projects may fall short of government expectations due to insufficient incentives. Yoon Ji-hae, senior researcher at Real Estate 114, said, "Maintenance projects such as reconstruction and redevelopment will not produce the volume the government expects unless clear incentives are provided to the association members," adding, "Some relaxation of regulations such as the two-year minimum residence requirement for association members is also necessary for smooth supply."

This content was produced with the assistance of AI translation services.